On 11 September 2024 the (Bill) was introduced to the House of Representatives.[1] The Bill will amend the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act) to include provisions regarding deterrence, detection and disruption of money laundering and terrorism financing.[2] Most changes will take effect from 31 March 2026.
Objectives of the Anti-Money Laundering Bill
The Bill has three (3) objectives:
- allowing the AML/CTF Act to account for high-risk services provided by tranche two (2) entities which are lawyers, accountants, real estate agents, and property managers in Schedule 1 Division 2 section 26C;[3]
- simplification and clarification of the AML/CTF Act so that businesses have better flexibility and less regulatory impact when attempting to prevent and detect financial crimes in Schedule 5;[4] and
- modernising the regulation of digital currency, as well as virtual asset and payments technology in Schedule 6.[5]
Key changes in the Bill
The Bill’s nine (9) key changes include:
- Changes to AML/CTF program requirements: This includes risk assessment to consider money laundering, terrorism financing and proliferation financing risks the reporting entity may reasonably face, proportionate risk mitigation measures to respond to the risk assessment, a new simplified reporting group concept to allow reporting entities to manage and mitigate common risks more efficiently, roles and responsibilities of a reporting entity’s governing body and AML/CTF compliance officer in Schedule 1.[6]
- Changes to customer due diligence: Includes reporting entities being required to identify and verify the identity of their customer and certain associated persons, and understand the money laundering, terrorism financing and proliferation financing risks associated with providing designated services to the customer and take steps to mitigate these risks, as well as changes to the customer due diligence exemption for assisting investigation of certain offences, and the exemption for the gaming and gambling sector in Schedule 2.[7]
- Regulating additional high-risk services: The Bill will extend the AML/CTF regime to certain higher risk services provided by gatekeeper professions such as estate professionals, dealers in precious stones and precious metals, and professional service providers such as lawyers, conveyancers, accountants, and trust and company service providers in Schedule 3.[8]
- Legal professional privilege includes privilege under Division 1 of Part 3.10 of the Evidence Act 1995 where legal professional; privilege is defined in section 242 and the guidelines in relation to legal professional privilege are provided in section 242A in Schedule 4.[9]
- Changes to the tipping off offence in Schedule 5.[10]
- Changes for the virtual assets sector: This includes exchanges between virtual assets, transfers of virtual assets of behalf of customers, safekeeping or administration of virtual assets, and participation in and provision of financial services related to an issuer’s offer and, or the sale of a virtual asset in Schedule 6.[11]
- Changes for the financial sector: This includes value transfer obligations and international value transfer service reporting, and bearer negotiable instruments in Schedule 7, and Schedule 8.[12]
- AUSTRAC information-gathering powers: This includes a new examination power, notice to produce power, and ‘authorisation to produce’ in Schedule 9.[13]
- Repeal of the Financial Transaction Reports Act 1988: This is located in Schedule 11.[14]
Customer due diligence standards substantially updated
The Explanatory Memorandum to the Bill clarifies that customer due diligence should be focused on the outcomes to be achieved.[15]
Key obligations for reporting entities
If the Bill is passed, reporting entities under the AML/CTF Act will be obligated to:
- enrol with AUSTRAC;
- develop and maintain an AML/CTF program tailored to their business;
- conduct initial consumer due diligence;
- conduct ongoing customer due diligence;
- report certain transactions and suspicious activities; and
- make and keep records.[16]
Links and further references
Legislation
Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024
Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 Explanatory Memorandum
Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1)
Further information about anti-money laundering compliance
If your business needs advice on any aspect of anti-money laundering compliance, contact us for a confidential and obligation-free discussion:
Malcolm Burrows B.Bus.,MBA.,LL.B.,LL.M.,MQLS.
Legal Practice Director
T: +61 7 3221 0013 (preferred)
M: +61 419 726 535
E: mburrows@dundaslawyers.com.au
Disclaimer
This article contains general commentary only. You should not rely on the commentary as legal advice. Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.
[1] Anti-Money Laundering and Counter Terrorism Financing Amendment Bill 2024 (Cth).
[2] Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth).
[3] Anti-Money Laundering and Counter Terrorism Financing Amendment Bill 2024 (Cth) Schedule 1 Division 2 section 26C.
[4] Anti-Money Laundering and Counter Terrorism Financing Amendment Bill 2024 (Cth) Schedule 5.
[5] Anti-Money Laundering and Counter Terrorism Financing Amendment Bill 2024 (Cth) Schedule 6.
[6] Anti-Money Laundering and Counter Terrorism Financing Amendment Bill 2024 (Cth) Schedule 1.
[7] Anti-Money Laundering and Counter Terrorism Financing Amendment Bill 2024 (Cth) Schedule 2.
[8] Anti-Money Laundering and Counter Terrorism Financing Amendment Bill 2024 (Cth) Schedule 3.
[9] Anti-Money Laundering and Counter Terrorism Financing Amendment Bill 2024 (Cth) Schedule 4 section 242, section 242A.
[10] Anti-Money Laundering and Counter Terrorism Financing Amendment Bill 2024 (Cth) Schedule 5.
[11] Anti-Money Laundering and Counter Terrorism Financing Amendment Bill 2024 (Cth) Schedule 6.
[12] Anti-Money Laundering and Counter Terrorism Financing Amendment Bill 2024 (Cth) Schedule 7; Schedule 8.
[13] Anti-Money Laundering and Counter Terrorism Financing Amendment Bill 2024 (Cth) Schedule 9.
[14] Anti-Money Laundering and Counter Terrorism Financing Amendment Bill 2024 (Cth) Schedule 11.
[15] Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 (Cth) Explanatory Memorandum.
[16] Anti-Money Laundering and Counter Terrorism Financing Amendment Bill 2024 (Cth) Schedule 1.
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